The Dormer Company uses the gross profit method to estimate its inventory in interim financial statements. The markup on cost is 50%. The following information is available:

January 1, 2016, inventory balance	$12,500
Purchases	25,000
Sales during January	24,000

Refer to Exhibit 8-2. The estimated cost of goods sold at January 31, 2016, is

$21,500

$25,500

$12,000

$16,000